Keith Codron's Law Blog

Businesses across the globe have experienced unprecedented interruptions and closures because of the COVID-19 pandemic. As a result, many businesses are finding it difficult to perform their contractual obligations. Consequently, a common but often overlooked contractual clause is in the limelight: the force majeure clause. Contrary to popular belief, the mere existence of a force majeure clause does not invalidate a legal obligation or provide a “get-out-of-jail-free” card. It instead provides parties with a justification to either delay or cease their performance of one or more contractual obligations.

On May 4, 2020, the Internal Revenue Service (IRS) published questions and answers regarding retirement provisions in Section 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In addition to providing aid for individuals and businesses, the CARES Act increases accessibility to funds and loans from certain retirement plans and accounts. The information the IRS recently published clarifies which individuals may benefit from the legislation and which plans and accounts are covered.

As small business owners grapple with the economic realities of nationwide stay-home orders and social distancing mandates, legislatures have been updating laws and developing new programs to keep the economy afloat. The latest and most groundbreaking is the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.2 trillion stimulus package aimed at supporting individuals, businesses, and governments now and beyond this pandemic. The federal government has earmarked $377 million to help small businesses avoid failure and encourage them to retain their workforces. Here are the most important things for business owners to know about the CARES Act:

In a matter of weeks, the COVID-19 pandemic has impacted the world and forced communities to reevaluate everything. Despite the unpredictability that has accompanied this global crisis, it is not too late to implement changes to protect you, your employees, and your business. Here are some tips and strategies to help you navigate these challenges and the ones to come.

Participate In and Promote Social Distancing Practices. The Centers for Disease Control and Prevention has recommended that employers “explore establish[ing] policies and practices, such as flexible worksites (e.

A skilled attorney is a critical part of any business owner’s advisory team. Business attorneys are equipped to assist you in handling a variety of tasks that can protect you from potential legal and business pitfalls, in addition to solving existing legal issues. As important as they are to your team, finding the right business attorney may be challenging if you do not know what to look for. Keeping in mind the following tips can help you find and choose the right business attorney.

You may have done your homework and weighed your options. Perhaps you’ve even considered the tax and non-tax implications for common business entities. We bet you’re also intrigued by the protections certain business entities afford their owners. The “corporate veil” that protects personal assets of the business owners can make a corporation or limited liability company (LLC) look very attractive.

To many, the word “veil” conjures up a sheer, flimsy, ethereal piece of material—perhaps fluttering behind a beautiful bride.

You are a new business owner and have decided to organize your business as a limited liability company (LLC). You are its sole owner and work for the company. How do you pay yourself? Are there guidelines regarding how often and how much you are entitled to? How do self-employment taxes come into play? The answers to these questions depend on how your LLC is taxed.

Taxed as a Disregarded Entity

By default, a single-member LLC is taxed as a disregarded entity. This means that the LLC’s income is treated as personal income for tax purposes.

Are you considering leasing office or retail space for your small business? The terms of your lease can have a huge impact on whether your business succeeds or fails. There are several important provisions that should be considered before you sign on the dotted line.

Leases of a certain duration (usually one to three years, depending upon the state) are generally required to be in writing and signed by the party against which they are being enforced. In reality, it is advisable for all commercial leases to be in writing, regardless of their duration. They should clearly spell out certain terms that are of crucial importance, including the following:

If you are starting a new business, the type of business entity you decide to establish will have an impact on the extent of personal liability, how the business is taxed, its management, the level of formality required, and many other factors. There are a wide variety of options, which can make this decision quite overwhelming. Limited liability companies (LLCs) and limited liability partnerships (LLPs) are two business forms that share some characteristics, but also have some important distinctions.

Similarities

Liability

LLCs protect members and managers from personal liability for the LLC’s debts and obligations, as well as for any wrongdoing or negligence committed by the other owners or the employees of the LLC. However, it will not protect members from their own negligence or wrongdoing committed in relation to the business.

Among those who desire to own their own business, many attempt to build a company from scratch. That, however, is not the only available option. Purchasing a company that is already in existence is a valid alternative. If you are interested in potentially acquiring a business instead of starting one from the ground up, there are several vital questions to answer.

●Do you want to purchase an independent business or a franchise? One decision you must make is whether you wish to buy a franchise or an independent company.

Contrary to popular belief, the S corporation is not a distinct entity type. According to the Internal Revenue Service (IRS), an S corporation is a corporation that has elected treatment as a pass-through entity for federal income tax purposes under Subchapter S of the Internal Revenue Code[1]. This tax election allows the corporation to enjoy a unique combination of benefits if it meets the following requirements:

●it has less than 100 shareholders

●all of its shareholders are United States citizens, residents, special trusts, or certain estates

●it has only one class of stock

●its membership is not comprised of any partnerships or corporations

Certain types of financial institutions and insurance companies are prohibited from electing Subchapter S treatment even if they meet the requirements.

Disclaimer

Hiring an attorney is an important decision which should not be based solely on advertising. The information contained on this website is for educational and informational purposes, only, and is not, nor is it intended to be, legal advice. For legal advice regarding your particular situation you should not act or rely on information found on this or any other website without first consulting a competent attorney duly licensed to practice law in the jurisdiction in which you reside. We invite you to contact our offices and welcome your telephone calls, faxes, letters and electronic mail. Please be advised, however, that contacting us does not in any way create an attorney-client relationship. Further, please do not send any confidential information to us until such time as an attorney-client relationship has been formally established by means of a signed written engagement agreement.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the Internal Revenue Service and U.S. Treasury Department, please note that any federal tax advice contained or perceived to be contained on this website, including any link, page or attachment, is not intended or written to be used or relied on, and cannot be used or relied on, for either of the following purposes: (i) avoiding penalties under the Internal Revenue Code; (ii) promoting, marketing or recommending to another party any transaction or matter.